The U.S. Trade War Has Caught Beijing’s Attention. Now Washington Needs a Longer-Term Plan.
The United States needs to build global alliances while demarcating clear areas of trust and competition with China.
China has long practiced a foreign-policy philosophy of restraint and patience, but under President Xi Jinping that has rapidly morphed into a design for world power and technological dominance. And while China’s radically transformed domestic policies have led to an enhanced geopolitical position, the United States has failed to make sufficient adjustments to compete. As a result, even if the Trump administration achieves a temporary mini trade deal, absent an overall strategic framework implemented by the United States, China will continue its plans to dominate commercial sea lanes, intimidate neighbors with its military might, and corner the global technology market.
Trump’s trade war, while not without its merits, is the required blunt instrument to deal with America’s $419 billion trade imbalance with China, which has not only played a “poor developing country” card too long but has also manipulated world trade rules to its selfish ends. For example, Beijing has blatantly stolen trade secrets, demanded technology transfers from global companies doing business in China, and propped up Chinese state-owned enterprises to create monopolies—all while expecting to be treated by the World Trade Organization as if it were still the same country it was in the 1970s. But the U.S.-China trade negotiations will hardly change much, since three of the four current constructive strategic dialogues have for all practical purposes been suspended. The international institutions created by the United States for global prosperity after World War II are deteriorating. Hegemonic power is being replaced by a fluid and uncertain multipolar world. Authoritarian regimes are springing up worldwide. As a result, China is filling an international power vacuum. It is also forging a closer axis with Russia, using technology as a means to further its inroads into other countries, and broadly taking full advantage of the grand strategic folly of a retrenching United States.
All is not lost for Washington. In order to make up for lost ground, it can strategically deepen relationships with partners such as India to strengthen its global power against China; form flexible networks and coalitions to compensate for weakened international institutions; identify and lead emerging policies in areas such as food and water security and climate issues, which will define the next decade; and prioritize technological advances to work with new partners to secure and reinvent the international order. All this starts with the United States working and executing a bipartisan foreign policy centered on a strategic framework with China that clearly delineates areas of newly formed trust as well as existing arenas of competition.
China wants to move its economy from being a place where the world’s goods are assembled to one where they’re designed. Despite this aspiration to move up the manufacturing value chain, Beijing still sees itself as a developing country rather than a developed one.
The United States has numerous important goals for its economic relationship with China, and several of these involve structural and verifiable change or are rooted in a desire to see Beijing abide by international trade norms as practiced by the developed world. Decreasing the trade deficit will only be successful if China changes its behavior and past practices on a deeper level. China must stop demanding technology transfers from U.S. businesses, respect intellectual property rights, and curb its campaign of espionage against American technology and trade secrets. U.S. companies also want to ensure that China allows fair access to the country’s domestic market without playing favorites and allowing state-owned enterprises to further manipulate their indigenous advantages. If the United States fails to persuade China to change its grossly unfair economic system, that will mean a failure to counter its technological schemes for world power. For example, Beijing sets specific targets for self-sufficiency in high-tech industries, and by 2049, it seeks the dominant position in global markets. This ambitious goal is a zero-sum game against the United States. Simply look at China’s test case against Australia over the past few years: China infiltrated Australians’ democracy, used cyberattacks against their country, and sought influence in their policies through foreign money. The result has been a robust reaction by Australia, which passed strong new laws restricting foreign investments and banned the Chinese technology firm Huawei from 5G contracts.
While Trump appears to be treading water on confronting China, he has failed to build a broader set of international partners: He has been unable to persuade key allies like India, Japan, and Germany to support him in an economic coalition that could challenge China and has withdrawn a proposal for a rival trade agreement, the Trans-Pacific Partnership. Trump should also consider expanding the Five Eyes partnership, an intelligence alliance with Australia, Canada, the United Kingdom, and New Zealand, to include India. The United States must expedite its partnership with India to new technological areas, cybercooperation, and more naval exercises in the Indo-Pacific. The United States and India, as democratic forces for the rule of law and human rights, could be leaders in defining global policy on cybersecurity, e-commerce, and the internet of things.
An ongoing failure to secure international partners has created an enormous vacuum in Washington’s overall Asia policy. China is aggressively filling this hole with its Belt and Road Initiative, as it constructs ports throughout Asia and builds a new military logistics base in Djibouti in the Horn of Africa. China’s 5G technology (soon to be 6G) plan to infiltrate sensitive networks worldwide is the 2.0 version of Belt and Road, essentially moving China from building a port in your backyard to having access to data in your bedroom. Furthermore, nonexistent American soft power has aggravated allies, and empty ambassador positions exacerbate a disconnect between Washington and the world. The fact that Trump failed to attend the East Asia Summit was a further signal that the United States does not fully prioritize Asia; Xi and Russian President Vladimir Putin were happy to command center stage.
But the way forward is not to analyze every issue as a zero-sum proposition: The American people are generally not supportive of a containment strategy or a hidden agenda of decoupling the world’s two biggest economies. According to a Pew Research Center survey in August, 60 percent of Americans expressed an unfavorable view of China, yet 50 percent said China’s economic growth is a good thing for the United States. In fact, no country has helped China’s rise to global prominence over the past five decades more than the United States. Washington has clearly supported Beijing’s efforts to elevate citizens out of poverty, lead the world in providing peacekeeping troops, and peacefully rise to increase international prosperity. America does not support a new Cold War with China. In a best-case international outcome, the United States and China could move forward over the next century and collaborate on a range of issues to promote global peace and prosperity. But that can only begin by halting the spiraling downward relationship with small steps of restoring trust.
As the United States works to rebuild trust with China, there are three key components to what would constitute a smart and effective overall strategic framework.
First, the United States can work with China on several areas of cooperation on policies of mutual concern. Washington can engage Beijing on issues including handling space debris, health care solutions for the two countries’ aging populations, state-to-state exchanges on climate change mitigation technology proposals, higher education initiatives, and counterterrorism. Each of these is not inherently controversial and can lead to a firmer foundation between the two countries. As strategic trust is gradually increased, the two sides might even arrange dialogue on rules for cybersecurity and address concerns regarding the proliferation of mutual weapons of mass destruction.
Second, clear areas of competition between these two global powers must be directly and firmly addressed. Since economic issues in today’s world are mired in domestic political debates, trade will be an increasingly competitive and volatile matter in the future. Technology concerns entangling national security interests will be highly sensitive and globally competitive. Internet security, data sharing, 5G (and 6G) technology, artificial intelligence, and high-speed quantum computing will become increasingly delicate areas of potential conflict. As the two countries more thoroughly explore the dimensions of these complex policies, some might move into areas of convergence and others into areas of conflict. For example, China and other countries have collaborated on cyberinnovations to benefit their economies, but these technologies are increasingly likely to be weaponized for censorship, facial recognition tools, surveillance, and monitoring. The world needs to establish clear lines of demarcation for cooperation and conflict, and to do so, Washington must clearly delineate lines between commercial use and cyberweapons potentially applied in authoritarian regimes.
Third, although the United States may look for common ground with China, there are some sensitive areas, particularly regarding defense and security, where the two’s interests are in clear tension. Disagreements on certain policies—Washington’s support for freedom of navigation in the South China Sea and Indo-Pacific, as well as its support for Taiwan in the framework of the “One China” policy—cannot be avoided, but the two can seek to manage the fallout from them. U.S. policymakers can establish clear guardrails around these issues by deepening military-to-military communications with the People’s Liberation Army and encouraging frank exchanges to prevent accidents, miscommunication, and mistakes.
Of course, the United States cannot allow its economic interests with China to come at the expense of its values. Washington must continue to champion human rights, respect the right of protesters in Hong Kong to freely demonstrate, criticize the campaign against Muslim Uighurs in Xinjiang, and to meet with the Dalai Lama. America’s global leadership throughout the past century has shined a bright light on the principles of liberty, freedom of expression, freedom of the press, and democratic rights. Countries worldwide expect the United States to reestablish its strong stand. That’s why it’s important for Washington and Beijing to openly acknowledge their differences on these issues because doing so would strengthen other shared goals. As a very high-ranking Chinese official acknowledged to me on a recent visit to Beijing: “Sometimes conflict and competition can foster cooperation.”
World events have dramatically altered since the United States opened relations with China 47 years ago. Xi has fundamentally steered China into controversial domestic and foreign policies. But U.S. foreign policy has not kept pace with technological challenges, global disruptions, rising nationalism, and international economic inequalities. Political leadership and domestic politics have changed rapidly in both countries and deeply complicated the U.S.-China relationship. That’s why Washington needs to thoroughly reexamine its policies toward Beijing. Focusing only on short-term trade wars and allowing a dangerous power vacuum to grow across Asia will only increase the chances for unintended clashes.